How to Build an Unstoppable Business

How to Build an Unstoppable Business

Your gym business can last for decades … if you build it the right way.

First, you have to get it moving smoothly.

Imagine a huge, heavy flywheel—a massive metal disk mounted on an axle. It’s three stories tall and two feet thick. Your job is to get the flywheel turning on the axle as fast and as long as possible.

But first, you have to remove the dead spots: the flat parts of the wheel. Then you have to remove obvious obstacles from your path. Then you can start pushing.

But where to push?

 

The Six Handles on the Flywheel

 

There are really six handles on your flywheel—six pressure points where you can push to keep the thing turning.A yellow circle named The Two-Brain Business Flywheel.

Our Incubator program is built to help you smooth out the wheel, remove the speed bumps and then push each one of those handles at the right time. In short, it helps you make the first real turn of the business flywheel.

Think about the big wheel on “The Price Is Right.” You can use any one of the handles and the wheel will turn faster.

Our handles are:

  • Teaching your Mission and Vision to everyone around you.
  • Improving your operations.
  • Upgrading your team.
  • Keeping your clients longer.
  • Selling better.
  • Getting more leads.

There’s no denying it: Your first pushes of your business flywheel are all-out efforts. They’re really hard. But your mentor is going to ensure you’re pushing in the right direction.

After a lot of effort, you’ll get the flywheel to make one complete turn.

As you start to get the wheel moving, you’ll see the first few results. Keep pushing, and the wheel will turn more smoothly. Eventually, it will have just enough momentum to make a full circuit on its own. But keep pushing and the flywheel will start to gain some speed.

Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. It moves a thousand times faster, then 10,000, then 100,000. The huge, heavy disk flies forward with almost unstoppable momentum. You’re not pushing harder, but the flywheel goes faster and faster.

When your flywheel is moving, your job is to keep it rolling down the road to wealth faster and faster.

 

The Value of Consistent Effort

 

There’s never one big push that makes the flywheel turn faster.

If someone said, “Which push really made the difference? Was it the first? The 10th? The 27th?” you’d find the questions ridiculous. But that’s how the media portrays business success: as if one breakthrough moment made all the difference.

What really makes a difference? Pushing the flywheel. Now, in the Incubator, we install those six handles on your flywheel. Then we push on each handle, in order, to make the wheel go around.

Businesses never transform from “good” to “amazing” through one short-term effort but rather through the continuous pushing of the flywheel to make it go faster and faster.

After the Incubator, the next stage of mentorship is what we call the Growth Stage.

In the Growth Stage of our mentorship program, you’ll work to push the flywheel faster and faster.

Every month, you’ll work with a mentor to make better use of one of the six handles. You’ll grab one and push your flywheel faster. You’ll identify obstacles that might slow your flywheel down, and you’ll remove them.

You’ll push the wheel down the road to wealth.

You’ll be upgrading your mentorship and upgrading the tools you use to grow your business. Here are some of them

  1. Monthly mentor calls.
  2. The Two-Brain Dashboard and Roadmap to Wealth.
  3. Masterclasses.
  4. Monthly Highlight PDF with a planner and key action items.
  5. DFY media templates.
  6. Comprehensive guides on topics such as social media, the flow state, Affinity Marketing, how to grow a PT business, business and hiring plans, “intrepreneurship” (to help you build careers for your coaches) and more.
  7. The Two-Brain Bridge Fund for emergencies.
  8. Peer support.

We want to move you closer to wealth. After you’ve done the first hard pushing on your business flywheel, we want to get it moving faster!

The last step is to train someone else to keep pushing your business flywheel so you can ascend to building your personal flywheel. I’ll write about that in the next article in this series.

 

Other Articles in This Series

Building Your Personal Flywheel
Removing Speed Bumps
The Flywheel Turns on Trust

Fat People on Mars

Fat People on Mars

In a recent series of articles, I talked about playing the “infinite game,” how to avoid the trap of “competition” and the mindset necessary for success.

My mission is to make 1,000,000 fitness entrepreneurs wealthy. Because the world needs more fitness coaches.

 

Evolution to Enlightenment

 

Until the last 100 years, humanity has concerned itself with playing an infinite game. We won merely by surviving. First, we survived long enough to replicate ourselves. Then we survived long enough to overlap generations: We invented grandkids.

Now we’re surviving beyond the age of manual utility and enjoying decades as observers. We have ease. We have medical care. And hell, we should: Our ancestors worked hard to give us this gift.

We can do all these things because, as a species, we’re wealthy. Capitalism has created the opportunity to coast through our last years. We no longer work ourselves to death; we work ourselves to pension. The poorest person in Western society today is wealthier than the kings of Europe were 200 years ago: We have medicines and food and access to water. We have sanitation. We avoid most diseases and cure almost all the others. We have time for leisure and coins in our pockets.

We have time to wonder, “What’s it all for?” and we have time to Netflix and chill.

But … .

We have not survived millions of years of evolution to sit on the couch and watch Oprah.

We have suffered through famine. We have struggled through wars and squeaked our way through plagues. Our bodies are adapted to survive through conservation of resources.

We now have more than we need. But our surplus is killing us: Our greatest health problems come from abundance. The bounty of victory is clogging our arteries, our brains and our planet. We have so much that we’re choking on it. Our bodies are fattening, our brains are slowing, and our environment is filling with our garbage. We have no universal “just cause” left, so we’re depressed. We’ve survived eons of need just to realize that surplus might destroy us in the end.

We might, someday, escape our collective pollution by rocketing off to Mars. Or we might banish our garbage from our beloved planet by launching it to the moon. Slowly, inch by inch, we’re conquering space.

But we’re losing the fight to conquer ourselves.

 

“If You’re so Smart, Why Aren’t You Happy?”

 

The real goal of humanity isn’t survival. That was just a short-term goal. The real goal is happiness.

The ultimate goal of the neocortex—the most evolved part of the brain, the part that separates us from every other species—is to make itself happy.

Call it “enlightenment” or call it “heaven” or call it anything you want: When things are going well, we secrete “reward” chemicals that please the brain. Dopamine and serotonin are the trophies we get when we do things right. Triggering these chemicals is the brain’s ultimate goal. Our bodies follow our brains around, and we are constantly led toward the pursuit of happiness.

We’re just not sure where that is, exactly.

We know how to prevent unhappiness, mostly. We know which boxes must be ticked first: air and water, food, security, habitat, a sense of belonging. We can’t be happy without those.

Abraham Maslow described the path to self-actualization in his Hierarchy of Needs. His little pyramid looks a lot like the tip of the evolutionary spear.

The founders of the United States said their goal was “Life, liberty and the pursuit of happiness”—in that order.

So let’s get on with it.

 

Halfway to Happiness Is Health

 

A healthy person wants a thousand things. But a sick person only wants one thing: to be well.

Elsewhere, I wrote that to solve any problem you have to split it in half, and then split it in half again, and so on, until you identify one specific action to take right then.

Later, I wrote that Greg Glassman’s “Sickness-Wellness-Fitness Continuum” was brilliant but incomplete: that the continuum should include death on its left side. Today, I’ll add that it should include “happiness” on its right side. Fitness isn’t the ultimate goal; it’s a step in the journey.

Now, plenty of people are happy without being fit. But everyone who studies happiness—from neuroscientists to Buddhists—agree that some measure of fitness is necessary for an enduring state of happiness. Yoga was created to prepare people to meditate longer. A therapist’s first prescription for depression is usually “go for a walk.” And most medical practitioners understand that exercise works as well as antidepressants in many cases.

But depression is still the leading cause of disability worldwide. The World Health Organization says so.

Who is leading the pursuit of happiness?

I say it’s the people leading the pursuit of fitness. Because fitness and happiness are interdependent, fitness professionals are best positioned to lead our species forward.

So we need more of us.

My first training business wasn’t Catalyst; it was a 1:1 strength-and-conditioning practice called Focus. I made two T-shirts and about a dozen homemade cards with “FOCUS Strength and Conditioning” on the front and “The Continued Evolution of the Species” on the back. That was 1998. But I still believe it—that evolution isn’t over. That the human race has evolved toward happiness. Or self-actualization or nirvana or enlightenment or heaven. That we have the tools—and most of the knowledge—to get there.

But we’re waiting to be led out of the wasteland.

If we produce 1 million fitness entrepreneurs, I believe one or two will figure it out.

Some of my friends are already working on it:

Colm O’Reilly—listen to his podcast here.

Craig Hysell—sign up for his daily blog here.

Bonnie Skinner—read what she has to say about depression here.

Mark Divine—simple, directive daily exercises here.

If you want to be happier, we can help.
Click here to talk to a Two-Brain mentor for free.

We All Can Win

We All Can Win

In the first article in this series, I wrote about Playing the Infinite Game. Here’s how the philosophy applies to your business.

Gym ownership is not a zero-sum game. To get a new client, I don’t have to take one of yours.

In fact, it’s a positive-sum game. As more gyms open, the cost of opening a gym goes down. Equipment is cheaper now than it’s ever been. And best of all: The expensive lessons learned by tens of thousands of gym owners are available in our Incubator. You can pay a little and dodge hundreds of thousands of dollars in costs.

Microgym owners can make a great living from 150 clients. That’s it: 150 great people paying the right rate and staying long enough to stabilize the business.

You don’t need to fight me for clients. I don’t need to fight you for coaches.

 

Fear Vs. Facts

 

New fitness Founders think they have to compete for a few simple reasons:

  • We’re mostly first-time entrepreneurs.
  • We’re scared.
  • We don’t have a buffer (we need to make money now).
  • We think the market is limited.

This was me, in 2005.

I opened Catalyst with 30 clients. But that wasn’t enough, and I thought I had to take clients from other local trainers to succeed. I remember saying to my partner, “I’m going to bankrupt everyone else!”

But I didn’t. Many of the microgyms that were around in 2005 are still around today. They kept some clients and got new clients. Some of theirs came to me, and some of mine went to them. If they were good at business, they’re still operating.

The key to a good gym isn’t getting clients. It’s keeping clients. And in a small city, even when the major employers go bankrupt, there are more than enough clients—if you build your business the right way.

In the next articles in this series, I’ll write about why this is true. I’ll explain how you can avoid having “competition,” describe the mindset necessary for success, show why you want a Two-Brain gym next door, and detail how we’re going to make 1 million fitness entrepreneurs wealthy.

 

Other Articles in This Series

Playing the Infinite Game
Never Have Competition Again
The Mindset Necessary for Success
Why You Want More Two-Brain Gyms in Your City
1,000,000 Fitness Entrepreneurs: The Two-Brain Plan

Buy an Existing Gym or Start From Scratch?

Buy an Existing Gym or Start From Scratch?

As Two-Brain gyms become more successful, they’re often approached to “buy out” another local gym owner. Or, after building replicable processes, they see the opportunity to expand to a second location.

As the gap between profitable gyms and unprofitable gyms widens, these opportunities will become more common.

So which is better: to start a new gym from scratch under your profitable brand or to buy an existing gym—and its revenues and problems?

 

Setting the Baseline

 

Let’s start with the cost to start a gym and compare the benefits and challenges of buying an existing gym against that anchor point.

You can start a new gym for under $30,000, including $5,000 for mentorship (to make sure it works), $20,000 for equipment (that’s more than enough), and $5,000 for space upgrades.

(You can get our free Ultimate Business Plan template here.)

But there are some cases where it makes sense to buy an established gym. Just make sure you answer the questions below first.

 

Questions to Answer Before Buying

 

Why do you want to own a second gym?

If I hear: “I just want to help more people. My first gym doesn’t take any of my time,” then we proceed with the purchase.

But usually, I hear this: “It’s a great opportunity. There are no other gyms in the area. My members could choose where to visit. It’s almost profitable. I know I could fix it.”

That last one is in bold because I hear it a lot.

The problem is that it takes three times the effort and three times the time to fix a problem than to avoid the problem. Here’s a case in point: Two-Brain mentor Kaleda Connell built a profitable gym and reached functional retirement in three years. It took me 10. She started from scratch; I had to fix my early mistakes.

Click to listen to Kaleda’s story.

And if you’re opening a second location to make more money, you should be sure that you’re maximizing revenue at your first location. Because a second location doesn’t double your workload; it quadruples it.

 

Is There a Third Option?

Here are the questions I ask next:

  • Is there a chance you could get the gym’s members even if you didn’t buy the gym?
  • Is there an easier way to increase your income in your current gym in less time than you’d require to fix the other gym?
  • Are clients in the other gym accustomed to lower rates? Do they match your target demographic?
  • Why is the other gym failing? Are you buying the problems that are killing it?
  • Does a higher membership count move you closer to your “perfect day”?
  • What liabilities are you also buying? (For example, a lease.)

After thinking it through, many owners decide not to buy out another owner. Here are some reasons I’ve heard recently:

“It would take me months to fix that gym. If I calculate the value of my time, it would be a lot easier to just increase my sales by $2,000 per month at my current location.”

“I’m pretty close to my perfect day already. I can’t imagine dealing with all the discounts and student memberships that killed the other gym.”

“I know I could fix the culture over there, but it would cause me a lot of stress in the meantime.”

“They want a lot more than their valuation. No thanks.”

“I realized it was just my ego saying, ‘I want to be the guy who owns two gyms.’”

Many decide they don’t want to buy the other person’s problems. But they do want to help. So sometimes they offer the other owner a job or pay for the client list or even buy the equipment.

There are ways to help that don’t involve sacrificing your perfect day (or your income!) to save someone else. But kudos for wanting to!

 

What’s the Other Gym Actually Worth?

If you’re sure you want to own two gyms and you’ve examined the less expensive, easier options, the next step is to anchor the conversation with numbers. You can use our valuation tool:

Rigquipment Finance DCF Worksheet for TwoBrainBusiness.com

Forget intangibles like “community” or location. How profitable is the gym? How long has it been open? How much of my time will this second location require?

If the gym has been open for 10 years and the owner earns $30,000 per year, take a hard pass—you can make more than that in your first year if you start from scratch with a mentor. And you won’t have to go through the work and pain of trying to change the gym.

After all, there’s a reason the owner is selling—and it’s not because he or she wants to “pursue other opportunities.” No one sells a profitable gym that runs itself.

 

Do I Have to Buy It NOW?

If you do want to buy out another, we’ve been through it many times. The path is clear. Just make sure your own house is in tip-top shape because you’ll have to focus your full attention on the second gym for a few months.

Clients who have been through the Incubator are generally successful when they buy out another gym—unless they decide they’re doing just fine with one.

After all, no one needs a second gym when the first one pays well.

You can download the two free guides “How to Buy a Gym” and “How to Sell a Gym” here:

Free Tools

If you have questions, don’t leap before you talk to us for free. Click here to do so.

Training Coaches: Internships

Training Coaches: Internships

It’s tough to hand your baby over to a new caregiver, isn’t it?

But when you own a business, you have to stop being a technician and start being an owner. So you replace yourself in lower-value roles—and, eventually, you replace yourself as a coach.

I’ll outline our process below. The process of training coaches has been one of my most costly mistakes in my 12 years as a gym owner.

 

Mistakes to Avoid

 

First, here are some hiring mistakes I made:

  • Hiring people who “look good on paper.”
  • Hiring for education instead of personality.
  • Going straight to a salary instead of the optimal 4/9ths Model.
  • Believing shadowing was a useful teaching method.

Here are some really common mistakes we see in other gyms:

  • Undefined processes (“shadow me until I think you’re ready”).
  • No continuing education plan after hire.
  • Long internships for no reason (“they’ll call you doctor”).
  • Relying too heavily on shadowing instead of instruction—read more here: “Is Shadowing Overrated?”

The most common mistake is an internship process that’s long for the sake of being long. This is typically a sign that the owner isn’t quite clear enough on his or her vision or is a little too focused on the “knowledge” piece of coaching.

When you’re training doctors, this is valid—they need more knowledge than bedside manner. But we’re not training doctors, and we get to see our clients every day if our coaches can keep them coming back.

We believe that coaches should be different but follow the same template in a class. If they tick all the boxes—professional appearance, hearty greeting, appropriate warmup, one-on-one attention to every athlete, motivating coaching, smiling/hugs/high fives—then they don’t need to be a carbon copy of the owner.

For that reason, our coach training process isn’t called an “internship” at all.

 

First Filter: The Advanced Theory Course

 

Every year, we hold an eight-week specialty class called an Advanced Theory Course. It’s open to six members, and we secretly filter the members by personality only.

Here’s the overall template:

 

1. Four Weeks—Be Taught, Be Trained

Participants attend four lectures by the owner (or the head coach) and are then assigned homework. They watch video modules, submit assignments and group up on Saturday mornings. They’re taught the CrossFit class template and train together in our regular groups. They track workouts on paper, noting how the class followed the template and whether the coach ticked all the boxes.

 

2. Four Weeks—Teach and Train Others

In the second stage, ATC students do “book reports”—teaching one main point from their chosen author—to the rest of the ATC group. Then they run a class for other ATC participants only. The goal of this stage is to identify people who are comfortable and fun in front of a group and people who can do their homework, absorb information, and teach it back.

After eight weeks, everyone graduates—back to class.

If we identify a person in the ATC who possesses an optimal personality, shows up on time and can translate knowledge into useful information, we invite him or her to the next phase.

 

3. Four Weeks—Practice the Art of Coaching

In this stage, the ATC student registers for a CrossFit Level 1 weekend and begins a “six-and-six” transition to coaching. The student will create and lead warm-ups and cool-downs for six groups and assist the main coach in the skill-teaching portion of the class. If those go well, the student will swap roles with the main coach for six more groups and then be evaluated.

New coaches are evaluated on the same criteria as our existing coaches. If they score 7 out of 10 in all requirements, they can start leading on-ramp sessions as soon as they earn the CrossFit Level 1 certificate. If they don’t score a 7 in all categories, they can redo the “six and six” classes—or they can just return to being a student. That’s fine.

The key components of the ATC model are:

  • Choosing people who will make clients happy.
  • Evaluating and providing feedback at each step.
  • Having objectively measurable criteria for advancement (instead of hoping we “rub off” on them through shadowing).

Asking a future part-time coach to succumb to a six-month shadowing process is overkill. It’s inefficient, lacks clear objectives and produces a different result every time.

Remember: Greg Glassman owns the largest brand in the fitness universe, and he’ll let you use it after only two days of training. But the L1 doesn’t filter for character and presence because those are mostly taught by our parents.

Identifying the fun, caring clients in your box is the first step; teaching them to teach is the easy part.

 

After the Filter

 

After the ATC, we believe in training coaches in four stages. You can read about them on the Two-Brain Coaching site.

In short:

  • Coaches should learn how to work with 1:1 clients first.
  • Then coaches should learn how to apply their skills to a group setting.
  • Then they should learn how to program for 1:1 clients instead of delivering your programming.
  • Then they should learn how to program for groups based on data and results.

Read more here:

The Four Stages of Coach Development

You can listen to Two-Brain Coaching co-founder Josh Martin talk about Degrees of Coaching on Two-Brain Radio.

 

Great Coaches Are Method Agnostic

 

The Two-Brain Coaching progression starts with principles and then moves to methods.

My principles include getting the clients results, first and foremost. I really don’t like the dogmatic adherence to any ideology. That’s what first attracted me to CrossFit: The method combined the basics from kettlebell training, weightlifting, gymnastics, running and even parkour, back then.

I want my coaches to learn how to coach first and how to apply a specific method second. So I put coaches at Catalyst through the Two-Brain Coaching First and Second Degree programs before I send them to a CrossFit L1. This makes them insurable, gets them some experience (and a bit of money), and teaches them how to relate to people before they learn how to spot flaws in thruster technique.

I’d also send them to Pilates certifications if I thought them useful. Or yoga. Or whatever new spin class variation appears next week.

I want my coaches to know how to get results, period. And that means training the best people in the best way.

 

Other Articles in This Series

Training Coaches: How to Find New Coaches
Training Coaches: Scope of Practice
Training Coaches: Continuing Education
Training Coaches: Building Careers

Starting a Gym: Do You Need a Partner?

Starting a Gym: Do You Need a Partner?

Short answer: probably not.

Entrepreneurs accept partners for three reasons:

  1. Complementary knowledge.
  2. Investment.
  3. Fear.

In some cases, partners can help a business launch and scale more rapidly. But in an owner/operator gym, there’s really not much room for two owners.

In this post, I’ll share why you might not want (or need) a partner and how to find a good partnership if you do. I’ll also give you the tools you need to make the partnership work.

 

Why We Take Partners

 

I started Catalyst with two partners. I couldn’t have started without them.

My first partners served two important functions: They removed the obstacle of choice by basically dragging me into a lease on some gym space. And they loaned me $16,000 to buy equipment.

In return, they wanted a recurring return on their investment: $1,000 per month forever, plus the loan payment. In hindsight, this seemed like a bad deal. But I wasn’t thinking logically at the time: I was thinking emotionally.

What I was really buying was a way around my fear. I thought, “These guys are my parachute.” Also, subconsciously: “If I screw up, it won’t be entirely my fault.”

But two years in and $24,000 paid, I started to resent their partnership. I was doing all the work; they were getting paid in good months and bad. Even when I missed a paycheck, they didn’t. The novelty and gratitude wore off, and I started to ask, “How do I get out of this?”

The truth is, it’s really hard to get out of a partnership. So before you enter one, here are some easy alternatives to the three benefits of partnerships that I mentioned earlier (knowledge, investment and fear):

 

1. Knowledge

In tech companies, it’s sometimes wise to have a partnership between a visionary and a technician. One person sets the course and the other puts in the hours programming.

But in a microgym, that’s not really necessary: The owner is always the first coach, and the gym was built to fulfill his or her vision.

Instead of giving up a share of your money forever, hire a mentor. You’ll get industry-specific knowledge, much higher ROI and step-by-step processes instead of just a sympathetic ear. And you won’t tie yourself into paying someone forever.

 

2. Investment

A partner who provides startup funding in return for equity might seem like an angel. But if someone has $20,000 to risk on a fitness business, he or she is probably not dumb: the investor expects a return. And every investment he or she makes should provide an outsized return. If it doesn’t, the investor can always put the money somewhere else.

That’s fair. But, like me, many first-time entrepreneurs don’t see the long-term payments they’ll be making and eventually get mad about the agreement.

“He’s made enough money off me!” they think, as they open the door in the dark at 5 a.m. But the investor just assumed the operational partner understood the agreement and provided the opportunity.

This is why you should borrow money from a bank instead of seeking an investor in your gym: The bank might charge some interest, but the bank eventually goes away. The bank doesn’t want to talk about your programming. The bank doesn’t want $500 per month until the end of time. The bank doesn’t want to treat you like an employee. It just wants its tiny fee for giving you the money.

 

3. Fear

I’ve worked with several gym owners who decided to “spread the risk around” by opening with multiple partners. This is almost always a catastrophe: four people become exhausted and impoverished instead of one.

A microgym isn’t an investment-grade asset. But the people in many of these partnerships just haven’t done the math to figure out how many clients they’ll need (at what rate) to pay everyone involved.

Worst of all: Everyone ends up hating one another. And broke, and tired.

Entrepreneurship is scary. But if you want to do it, hire a mentor. Instead of having four people guess and argue, talk to one person who has been there, done it successfully and will eventually go away until you need him or her again.

 

How to Get out of a Bad Partnership

 

OK, so you’ve determined that you’ve outgrown your partnership. The simple way out is to get a valuation and then purchase the partner or partners’ shares.

If the company isn’t doing well, this is great news: You can buy the shares for very little. Just use the Shotgun Exit term you’ll see in our Sample Shareholders’ Agreement.

But if you don’t have the money (or you don’t have a shareholders’ agreement that spells out the terms of your exit), you’ll have to leverage something else. What do they care about more than ownership?

In my case, I was facing a court battle with city hall over an occupancy permit. I couldn’t afford the HVAC upgrades they insisted we needed. I was ready to go to war because it was the only way to keep my box open.

But my partners did a lot of business with city hall and didn’t want to tarnish that relationship. I explained that I didn’t have much choice but was willing to buy out their shares and let them avoid trouble. They immediately and graciously agreed.

If all else fails, use your failure as leverage: “Look, Bill, we both had the best of intentions when we started this thing. I know we’re partners, but I feel responsible. The business isn’t doing well, and I don’t expect you to take a loss here. I would feel better if you’d let me take on your share of the debt and then try to figure it out from there.”

 

How to Set up a Great Partnership

 

Great partnerships aren’t born; they’re made.

Before you enter into a contract that’s more binding than marriage (no joke), you should talk about your relationship.

Who will do which roles in the new company?

How will each of you make money in the new business?

How will you make decisions?

How will one of you eventually exit?

Download our Sample Shareholders’ Agreement here.

 

Equality Versus Equity

 

Who gets paid? How much?

There’s a difference between owning 50 percent of a business and being paid 50 percent of the profit.

The operating partner (the one who’s in the gym every day) should be paid a wage before profit is calculated.

It’s also fair for the lending partner (that mythical “money guy”) to build a loan repayment structure into the business’ expenses before profit is calculated.

But the important part is this: You don’t have to get paid based on your equity stake. You should be paid based on your role in the company.

If both partners will be working in the business, that’s fine—break down your roles, assign a value to each, and pay yourself based on the value you bring. Just don’t say, “We’ll split it all 50-50!” because no two partners are ever 50-50 contributors.

It might sound like I’m down on partnerships, but I’m not: I love partnerships. I just hate unnecessary servitude and expensive mistakes. Listen to my podcast on the topic here:

Two-Brain Radio Episode 81: Partnerships

Get a loan, get a mentor—make your debts short-term and grow your confidence forever!

 

Other Articles in This Series

How to Start a Gym
Starting a Gym: Location, Space and Equipment
Starting a Gym: Scaling Up
Starting a Gym: Adding Staff
Starting a Gym Marketing